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STUDENT DETAILS

Student name: Nguyen Thuy Vy Student ID number: B1112014421

Student name: Nguyen Ngoc Nhu Y Student ID number: B1112014391

Student name: Dinh Hoang Minh Anh Student ID number: B1112014434

Student name: Vo Duyen Tran Student ID number: B1112014550

Student name: Tran Van Thai Tuan Student ID number: B1112014541

UNIT AND TUTORIAL DETAILS

Unit name: Academic English Unit number: AEn-T121WSB-6

Tutorial/Lecture: AEn Class day and time: 1PM Mon-Wed-Fri
Lecturer or Tutor name: Lennie Heather
ASSIGNMENT DETAILS
Entrepreneurship - Question: Some people believe that family enterprise is the most efficient
Title: way of running a successful business. To what extent is this a fair comment.
Length: Due date: 05/04/2021 Date submitted: 04/04/2021

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Student’s
signature: Nguyen Thuy Vy
Student’s
signature: Nguyen Ngoc Nhu Y
Student’s
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Student’s
signature: Vo Duyen Tran
Student’s
signature: Tran Van Thai Tuan
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1
 By
Tran Van Thai Tuan
Dinh Hoang Minh Anh
Vo Duyen Tran
Nguyen Ngoc Nhu Y
Nguyen Thuy Vy

Admittedly, society doesn't exist without an economy, and businesses frame the global financial

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system. On top of that, every enterprise requires an adequate leader who converges many factors:

integrity, accountability, empathy, humility. As Judy Green et al. mentioned in "The Effects of Goal

Orientation and Client Feedback on the Adaptive Behaviors of Family Enterprise Advisors" that

advisors play a vital role within family enterprises. Moreover, those entrepreneurs are always ready

to tackle financial risks within the hope of profit and increasing the possibilities of prosperity.

Though entrepreneurship is the overall process of developing, launching, and running a business, it is

argued that there are many alternative varieties of entrepreneurship. Although forming family

businesses is assumed to be the foremost effective way to gain prosperity, there are still several

drawbacks of forming a family corporation. There are many advantages that family enterprise brings,

such as saving time in finding investment, creating a stable situation in the marketplace, having a

specific reputation. However, the leadership cannot be denied that family conflict will occur and

manage less creatively rather than one member companies. the advantages and disadvantages that

family enterprises arouse are put considerately in four spheres: Commitment and unified leadership;

the ingenuity of the subsequent generation requirements to satisfy the conditions of success;

disagreement between members of the family may directly threaten the external footstep and family

bias issues.

Running a successful business, especially a family enterprise, mainly depends on the way

individuals illustrate their commitment and the unification in choosing a well-behaved leader.

Firstly, it cannot be denied that the word "loyalty" or "commitment" refers to a goal that is crucial in

sustaining a relationship, it has been defined widely in marketing literature (Oliver, 1999; Schakett,

2010), and it is perceived to be the most important element and target in relationship marketing

(Sheth and Parvatiyar, 2002). In the relationship marketing literature, commitment has been defined

by Morgan and Hunt (1994) as the recognized estimation that a financial institution would terminate

the relationship with another firm in the relatively near future. In marketing, customer-supplier

relationship refers to a connected and long-term collaboration with complexity (Håkansson, 1987).

For instance, Berry and Parasuraman (1988) states in a service marketing context that “relationships
3
are built on the foundation of mutual commitment”. Moorman et al. (1999) referred to commitment

as “an enduring desire to maintain a valued relationship”. Thus, Berry and Parasuraman (1991)

maintain that mutual commitment is based on which relationships develop. The other vital part of

running a firm bases on the choose of an effective leadership who has been recognized as a key

determinant of corporate development and progress in a variety of situations, including profit-driven

businesses, amateur and professional activities, religious communities, and military assets (Judge &

Piccolo, 2004; Lowe, Kroeck, & Sivasubramaniam, 1996; Northouse, 2007). Furthermore, there is

strong indication that transformational leadership has resulted in crucial individual-level outcomes

like employee engagement, motivation, and job success, as well as organizational-level outcomes

like business performance (Barling, Weber, & Kelloway, 1996; Bono & Judge, 2004; Bycio,

Hackett, & Allen, 1995). Hence, the extant research provides reasonably strong support for the

theoretical predictions derived from the MLT (cf., House & Shamir, 1993; Howell & Avolio, 1993;

Judge & Piccolo, 2004; Lowe et al., 1996).

Future generation involvement has been one of the pillars of family business survival and

development. In the article "Taking the Pulse of Family Business”, Perman (2006) stated that many

family businesses will face a change of ownership over the next ten years because of the retirement

of the previous generations and the younger generation's explosive growth generation. The next

generation could make a significant contribution when it comes to identifying and reducing

disruptive threats as well as harnessing emerging technologies. One of the most distinguishing

characteristics of a family business has always been its ‘long-term' mindset – family businesses think

in generations, not quarters. The EY Global Family Business Survey (2018) indicates that most

family enterprises used internal accumulations and family-own capital for business growth as well as

innovation. This illustrates that the next-generations are willing to invest and persevere with a strong

sense of conviction, without relying heavily on outside capital or expecting immediate results. This

long-term dedication aids family business owners in dealing with difficult circumstances, and it can

be a major advantage in today's fast-changing environment. With their ever-evolving market

4
condition, some of the world's biggest and oldest family companies have a long process of adapting

and innovating to effectively run their company. In many ways, the next-generations have been at the

forefront of disrupting the standards and establishing new ones. Several have ventured into industries

that are vastly different from their traditional family businesses and are now effective leaders in

those fields. However, the successors' 'price' for joining and running a family company may include

giving up career opportunities that are financially and personally appealing. A new family member

entering a family business may appear to be losing his or her privacy. Moreover, when their

management styles clash, there may be some conflicts between parents and children. A company

might make compromises, such as rewarding members of the family who chose to enter or remain in

the family business. In a word, potential next-generation seems to contribute to the success of a

family enterprise.

Running families in business do have plenty of benefits in personal and market areas, yet business

owners often encounter several difficulties among family members in the company. Empirical

research and anecdotal evidence both suggest that numerous crashes in these businesses can be

traced to personal disputes within family members (University of Auckland Business Review, 2013).

Family conflict is one of the unavoidable cases which affects businesses negatively. There are many

reasons for creating fights in a family business: negative emotion, rivalry or succession. In the article

“How to Run a Family Business”, Christine Lagorio stated that one of the most challenging aspects

of running a family company is communication. Communication between family employees requires

honesty, clear and non-secret about any concerns in the company, thus, poor communication leads to

dissenting opinions, controversy, and misunderstanding about the company’s decisions. On the other

hand, the participation of family members in the management of family groups promotes biased

situations. In the article "Why damaging nepotism persists in family businesses" by Warwick

Business School (2015) web statistics that 70% of the family business is on the verge of bankruptcy.

Family group leaders often consider empowerment to the next generation as the safest measure, Dr

Eubanks (2015) said. Ignoring the qualifications and abilities of family members is often the best
5
option because of the stereotypes that outsiders can threaten the growth of the family group and

endanger your status. That has been listed by Keith G.Baldwin, covering wages and hours issues up

to complaints of discrimination, harassment, and unfair labor practices. Raising salaries and

promotions has created a very comfortable environment but will make family members become

extravagant and authoritarian. One of the risks when hiring relatives in the company is that they may

break the working rules, which other employees dare not do. According to Kayla Sloan (2017),

violating company rules for family members is normal behavior, although not intentionally, having a

family relationship that prevents the binding of discipline. Consequence will cause conflicts between

employees; families and other employees because the inequality leads to a negative impact on the

solidarity and development of the company.

In a firm, either family enterprise or non-family enterprise requires a potential innovator to

control the business model. Mainly, the leadership is a cohesive unity with an appropriate business

organization for the family businesses and unqualified loyalty. These beneficial outcomes make the

owner gain success quickly, and the next generation who has the opportunity to practice good

governance is a significant factor in determining whether the company has a strong foothold or not.

Besides some drawbacks, the positive impact of a family enterprise is tremendous, with the

established corporation and a fine foothold, the remaining factor is about the management, as the

world changes are counted on second so that entrepreneurs must get a progressive spirit to assist

companies in expanding their market and growing continuously.

Reference List

B. Hargis, M., Piotrowski, C., & D.Watt, J. (2011). Developing Leaders:Examining the Role of
Transactional and Transformational Leadership Across Business Context. Organization
Development Journal, 29(3), 51–66. Retrieved from

6
https://www.researchgate.net/publication/288137219_Developing_laders_Examining_the_role_of_tr
ansactional_and_transformational_leadership_across_business_contexts

Christine, L. (2011, October 8). “How to Run a Family Business” Inc. Retrieved from
www.inc.com/guides/running-family-business.html.

Davis, W. D., Dibrell, C., Craig, J. B., & Green, J. (2013). The effects of goal orientation and client
feedback on the adaptive behaviors of family enterprise advisors. Family Business Review, 26(3),
215-234. Retrieved from https://journals.sagepub.com/doi/pdf/10.1177/0894486513484351

Dr. Eubanks .(2015, September 22).Why damaging nepotism persists in family businesses.Warwick
Business School. Retrieved from https://www.wbs.ac.uk/news/why-damaging-nepotism-persists-in-
family-businesses/

Duerden, A. (2018, March 5). Global family business to make immediate headcount increases and
technology investments in response to disruption. London, GB. Retrieved from
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increases-and-technology-investments-in-response-to-disruption#:~:text=The%20EY%20survey
%20points%20out,increases%20of%20greater%20than%205%25.&text=%E2%80%9CIt%27s
%20good%20news%20for%20the,change%20into%202018%20and%20beyond

Giddings, B., Hopwood, B., & O'brien, G. (2002). Environment, economy and society: fitting them
together into sustainable development. Sustainable development, 10(4),187-196. Retrieved from
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Hamid, A. B. B. A., Ebrahimpour, A., Roghanian, P., & Gheysari, H. (2011). Commitment and
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s_Context

Keith, G.B (2019, October 22). The Four Biggest Challenges for Family-Owned Businesses.Davis
Wright Tremaine. Retrieved from https://www.dwt.com/blogs/family-business-resource-
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Perman, S. (2006, February 14). Taking the Pulse of Family Business. Retrieved from
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